As housing supply dwindles, some experts warn of prices beginning a dangerous climb

Demand for housing has become so intense that major builders are requiring prospective clients to sign up on lists for a chance to buy a home. If you’re among the 100-plus people in a queue, you can blame that on the region’s lack of new construction and near record-low listings.

“The problem is being created by the absence of inventory in the resale market,” said San Diego economist Alan Nevin. “That’s creating a panic mentality.”

That type of thinking has brought some housing experts back to the mid-1990s, when would-be buyers camped out for days at subdivisions when new phases were released. That process has been largely replaced by a more-organized method: waitlists.

Waitlists may be a more-controlled system than campouts, but they’re still a gamble for buyers. Supply is so low that your turn may not come for a while. Or your preferred home style may run out by the time your number is called. In one new community near Carmel Valley, clients who land on a list now are looking at an entry date of about summer 2014 if the current list pace continues.

Even if you make it out of a waitlist, you could see the price of new homes jacked up. Some homebuilders, taking note of increased demand, have been boosting prices after each phase.

Nevin fears these supply-demand dynamics could fuel a dangerous rise in home prices, which have accelerated due to a sizable share of investment and cash buyers creating more competition in the overall market.

Single-family home prices have risen 14 percent from a year ago while condo values have gone up by 21 percent, said Nevin, citing a recent per-square-footage analysis from the Greater San Diego Association of Realtors.

“That’s an outrageous increase even though (homeowners) love to see their home values go up. But it will become another debacle like what we had,” said Nevin, referring to the lead-up to the housing crisis.

Other industry experts said today’s price gains are an indicator of a recovering real estate market, not another housing bubble.

“We’re raising prices again, which we think is important for buyer confidence,” said Matt Sauls, a spokesman for Pardee Homes, which is based in Los Angeles and has an office in San Diego. The company has four actively selling communities in San Diego County. “It’s not the same kind of price increases we saw in 2005.”

Today’s real estate climate also raises long-term supply concerns. The fear is that a housing shortage is imminent as the job market improves, households continue to form and the amount of developable land keeps shrinking.

The current pace of residential building permits issued in the county is about half of what the region needs, said Marney Cox, chief economist at San Diego Association of Governments.

The lack of construction means tighter supply and in turn — because of greater demand for housing — higher housing prices. Price appreciation can be great for potential sellers who are underwater on their mortgages and have been waiting to list their homes for profit or to break even. But price gains are not a welcome sign for potential buyers, the same people who’ve been sent to real estate waiting rooms.